How sustainable is your bank? How to spot greenwashing.

What is greenwashing?  

Greenwashing is when organisations claim their products are better for the planet or for people than they really are. They might use words such as “sustainable” or “ethical” without explaining how or why their products are, or they might choose to hide certain information that affects how sustainable a product really is, which misrepresents it.  

Another way organisations greenwash products is by using branding and visuals to portray a product as “eco-friendly”: using a green colour palette or using some leaves on the packaging. Companies do this to build trust and encourage consumers to think that they’re making a more sustainable choice, even if that isn’t true.  
 

Is your bank greenwashing?  

Greenwashing also happens in banking. For example, high street banks might tell us how much they are financing renewable energy but avoid mentioning that they are still funding fossil fuels. Back in 2024, our research showed that half of people who thought their money was in a “green ISA” were actually banking with providers classified as “worst” for environmental credentials by Ethical Consumer. Analysis of UK banks from last year found that the majority are investing significantly more money into fossil fuels than they are in clean energy sources. 

Because of worries about greenwashing in banking and finance, the Financial Conduct Authority (FCA) introduced rules about greenwashing in 2024. Under FCA guidelines, whenever a firm makes a claim about sustainability it must be correct, able to be proven, clear and presented in a way that can be understood, fair and meaningful, and it should also be complete - meaning they shouldn’t leave out or hide important information. 

How to spot greenwashing  

 Here are a few things you can do to find out whether a bank is being honest about their sustainability claims:  

1. Find out if your bank finances fossil fuels  
   This is the big one! If a bank is pouring millions of pounds into the fossil fuel industry but talking about sustainability, they’re likely greenwashing. Tools such as Banking on Climate Chaos and Bank.Green can help you find out how much money your bank is directing into fossil fuels.  

2. Read your bank’s impact reports 
   If your bank publishes an impact report, it can be a rich source of information. Here, you can search for the evidence to their sustainability claims, check if your bank has a published commitment to reducing their greenhouse gas emissions or any management plans, and find out more about things like their equality and diversity policies.   

3. Find out where your money is held 
   Sometimes financial providers will hold certain products, such as savings or investments, with other providers. This could mean that the primary organisation has good sustainability criteria, but those third parties might not. Some banking apps also hold your money across many different banks, so it’s quite difficult to know exactly where your money is being held. It’s always worth checking if this applies to you, so you can research appropriately.    

4. Look at the lending and investment criteria of your bank 
   Is your bank being transparent about where it lends and invests? You can search for their lending and investment criteria to see how strict they are about where they direct your money, and see how sustainable or ethical their practices really are.

5. Check external rankings  
   There are many helpful resources online that rank financial providers by their sustainability and ethics, such as Ethical Consumer, or the Fair Finance Guide. Other helpful certifications or stamps of approval might include B Corp, or ethical finance awards.  

6. Look for sustainability labels on investment funds 
   There are now sustainability labels in place that can help you recognise whether certain financial products might have a sustainability or ethical focus. Although they must be the criteria set out by the FCA, it's worth noting that organisations don't need to be approved to use these labels. 
    
   Triodos Investment Management cannot use these labels because they are not based in the UK, however our investment funds have extremely high ethical and environmental standards. You can read more about our approach to impact investing here. 

7. Actively challenge greenwashing  
   If you see something that you believe is greenwashing, speak up. Just as your money is powerful, so is your voice. Challenge your banks, tell them that you don’t want your money being invested in harmful practices, and report misleading information.   

8. Know what’s important to you  
   What makes something sustainable to one person, might be different to the next. That’s why it’s incredibly important to find a bank that aligns with your particular values, and supports change that matters to you.  
    
   Triodos Bank is the only bank that publishes the details of every single loan and investment we make, so you can feel confident that you can find out exactly where your money is going and how it’s having a positive impact on people and the planet.